In its latest update of analyst ratings for mutual funds and ETFs, Morningstar upgraded five, downgraded seven, put three funds under review and affirmed the ratings on 57, including two target date series. It also initiated ratings on 14 funds, only one of which merited Gold: Vanguard’s Short-Term Inflation Protected Securities ETF.
The Morningstar analyst ratings are meant to gauge the ability of a particular fund to outperform its peer group and/or benchmark, on a risk-adjusted basis over the long term. It’s a forward-looking rating, unlike the Morningstar star ratings, which are based on a fund’s past risk and load-adjusted returns versus its peers.
Among the latest upgrades were three funds that moved up from Bronze to Silver: AQR Style Premia Alternative, PIMCO Foreign Bond (U.S. dollar-hedged), and PIMCO Global Bond (also U.S. dollar hedged). Both PIMCO funds are managed by the team of Andrew Balls, Sachin Gupta and Lorenzo Pagani.
Two other funds move up from Neutral to Bronze: Dreyfus/Standish Global Fixed Income and Vanguard Energy.
Four of the funds downgraded moved from Bronze to Neutral: Fidelity OTC, Hennessy Focus, John Hancock Balanced and Wells Fargo Growth.
Two were downgraded from Silver to Bronze: Berwyn and Invesco Small Cap Growth, and Diamond Hill Small Cap was downgraded from Gold to Silver.